Financial Tips For College Grads

Congratulations you graduated and your recently acquired knowledge and freshly printed diploma is proof you mastered college. Now you have to acquire more information and master your financial life.

Here we provide you with a few good financial tips that can help you tackle your spending after graduation. You may not like them, but if you manage to implement them as soon as possible, you will have more control on your spending and will manage to save more money for later phases of your life.

Spending on student loans.

Important rule of thumb: Your monthly payments shouldn’t exceed 8 percent of your monthly pay from your job.

Though let’s be honest, probably nobody told you that before you went ahead and signed the dotted line and took out all those loans…
If you are learning that now, your student loan monthly payments are probably going to be too high for your income, but you still have options.

Nowadays the federal government offers a lot of programs that help graduates keep their federal student loan payments manageable.

If your first job pays so little that you can’t afford the loan payments, the government will adjust your payments based the borrower’s income.

Ready to learn if you qualify for an Income-Based Repayment program?
Click Here Now!

Also, if you have no job yet, you can ask for a deferment or forbearance to temporarily delay your loan payments. If you want more information and would like to speak with an experienced student loan counselor call us right now at 877-433-7501.

If you don’t have a job yet and take one that serves society, you could qualify for a special loan forgiveness program based on your career.

Learn more here: Loan Forgiveness Program

Spending on a car.

This is definitely not the time to be making any big purchases. So forget about rewarding yourself with buying a new vehicle and taking on any more debt than you already have.
You should use only around 20% of your monthly income on car related expenses such as car insurance and loan payments. Review your car insurance policy to make sure you have sufficient coverage but get rid of services you may not need.
Do you have family in town? Then you probably could do without road side assistance. Hit up a relative or friend and have them take you to a shop.

Spending on housing.

Don’t spend more than 28% of your income on housing. You could maybe get away with stretching it to 30 percent if you are purchasing a home, because in the long run it should appreciate in value and perhaps be an investment for your future. Remember to consider insurance, repairs and property taxes as necessary costs too.

Overspending on rent is a major mistake. You will deprive yourself of the money you need to save for a house purchase in the future, and you might not be able to go out with friends, take trips, go back to school or even afford to take a lower-paying job that will make you happier.

Credit card spending.

Whipping out a credit card to cover what you can’t afford will dig you into debt and mean you pay over and over again for what you bought in the past instead of being able to buy what you want in the present. Don’t charge any more on a credit card than you can pay off each month.

Save. Save. Save.

You should have been saving money since before graduation. But maybe your only job was an unpaid internship and had no means of income…so now that you are out of college and will start your hard working years, devote some of every paycheck to savings. You should have an emergency fund so that if the car needs new tires you don’t have to charge them.

If you own a home, you should be saving about $100 to $150 a month for repairs that inevitably pop up. A rule of thumb:

In case you lose your job, have three to six months saved to get you through a new job search.

Also, while retirement seems far away, it is essential to save, beginning with your first job, in a 401(k) at work or an IRA if you don’t have a retirement savings plan at work. If you save 10 percent of your pay throughout life, you should end up with the money you need for your future.